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tv   First Business  KICU  May 21, 2014 4:00am-4:31am PDT

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"drive thru"... protestors plan a visit to mcdonald's annual shareholder meeting. in today's cover story... startups are flooding the sweets industry and they're bringing new flavor concoctions to the table. plus... is microsoft about to takeover the tablet market? and... an entreprenuer capitalizes on clean eating, with a healthy hot dog! first business starts now! good morning! i'm angela miles. it's wednesday, may 21. in today's first look: selling in front of the fed. the fed minutes come out later today.. yesteday, traders and investors decided to take profits as they worried about the next move by the federal reserve as well as retail earnings that came into the market tuesday on the
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shakey side. in the sessoin the dow plummeted 138 points, the nasdaq 29 and the s&p 12. gold ended unchanged. oil down a dime. wells fargo's sharreholder shocker! the bank plans to return as much as 75% of its profits to stockholders up from 34% in 2013. and, tgi friday's reportedly has been sold to for $800 million to sentinal capital and triartisan capital partners. trader larry shover of sfg alternatives joins us on this wednesday morning. larry we've already heard from some of those fed presidents that moved the market yesterday. today the fed minutes... what do traders want to hear-- what's going to move the market? > > i think what could move the market is any narrative related to the housing industry because they are going to talk about or they could talk about the fact that we are stuck in the mud and will there be any that, nobody's expecting many
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fireworks from the fed. > > the treasury did see some fireworks yesterday. tell us what happened there, and what to anticipate for today. > > yesterday yields got down to 251 let's keep in mind a lot of this is arbitrage opportunity. our yields are looking very attractive when you consider ireland's at 2.6 and italy's at 3% our country's in better health, our rates are just a better deal. so with that said june the fifth when the ecb speaks people are waiting for them to take action that might be the end of the bond rally. > > we do have some housing economic data coming into the market this week. how critical is that to traders? > > i think it's very important especially when we have the fed on top of that maybe speaking about housing. existing home sales thursday with new home sales on friday, it's going to add to the narrative. let's keep in mind our gdp last month turned out so weak we need something to move this market one way or the other and hopefully up. > > always a pleasure, larry. thank you. > > thank you. bus loads of protestors are
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expected to roll in for mcdonald's annual shareholder meeting. workers have made it clear they want the burger chain to raise their wages to $15 per hour and the right to form a union without retaliation. joining us by skype this morning, tsedeye gebreselassie, staff attorney for the national employment law project. good morning and will this make a difference? > > yes i think it will. you know if you look at what's happened over the last year mcdonald's has not had a very good year. this is the six major strike against mcdonald's and other fast food corporations by low wage fast-food workers who are saying look our median pay is less than $9 an hour. mcdonald's posted $5.6 billion in profits last year. we've been striking against the company and 150 cities across the country and now we're taking it directly to the shareholders that they understand this is going to affect their bottom line. > > but mcdonald's is yet to even talk about raising wages... > > you know they what they have said is that they said in their latest sec filings that they recognize the negative
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effects that the strikes are having on their brand, that they might have to raise wages in order to deal with it so they did acknowledge that something has to give and i think that these protests that are happening tomorrow and thursday are just the latest message for them that they've got to figure out a way to raise pay for the hundreds of thousands of workers. > > mcdonald's is borrowing media but here is what the company is out there saying. this is an important discussion that needs to take into account the highly competitive nature of the industries that employ minimum-wage workers. do you think that this is all it takes is more time? > > no i think that it is very clear the company's like mcdonald's can absorb the substantial wage increase. if you look at the fact that the minimum wage had just kept up with inflation with almost $11 an hour today, the fact that mcdonald's like i said made $5.6 billion in profit so clearly the money is there in the corporation so we have to figure out how to make sure it trickles down to the workers that are essentially providing mcdonald's the huge profit margins. > > thanks for coming on the show this morning. > > thanks so much for having me. microsoft unveils the latest version of its surface tablet. the company's tag line for the surface 3 is that it can 'replace your laptop" thanks to additional power and features. microsoft has been struggling in the tablet market amid tough competition from samsung and market leader apple. but industry analyst michael krigsman has high hopes going forward. "if you look back over the long history of microsoft, there have been many times when they've come out with a product, it hasnt been that great and
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they just relentlessly kept investing in that product until it becomes really good and then it takes market share." despite high consumer demand for the new gadgets when tablets hit the market, some analysts say the market as a whole is slowing. greater penetration rates and a lack of innovation in the products are cited as reasons. the largest ipo of the year opens for trading tomorrow. jd.com makes it public debut on the nasdaq. the chinese e- tailer is wildly succesful in china. and sells books, electronics, and apparel online similar to amazon. jd.com has a market valuation of roughly $24 billion dollars. the ipo could generate $1.7 billion. the share price range is $16 to $18. the ticker symbol is: jd. excitment is building ahead of jd.com's ipo-- because its' second in size to the behemoth that ipo's later this month... alibaba. but wealth investment officer jeff sica tells us-- jd.com is no alibaba.. "this is a dwarf of a company
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compared to alibaba, so everybody's going to look at this company and compare it to the potential that alibaba has, and coming in at about a $24 billion valuation, so if it becomes in between $16 and $18 a share it's too expensive to buy." jd.com is expected to price later today.. general motors recalls another 2.4 million vehicles. the cars include: the buick enclave, chevrolet traverse, gmc acadia saturn, chevy malibu, pontiac g6, cadiallac escalade, chevy silverado and gmc sierra pick ups. problems range from seat belts, to air bags to faulty retention clips. it follows gm's giant recall due to ignition switch problems. gm has recalled 15 million vehicles in this year. the automaker is doubling the charge it is taking in the
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second quarter to around $400 million tied to recall expenses. gm stock fell 3 percent yesterday, closing above 33 dollars. sprint will pay $7.5 million dollars for not honoring "do not call" requests by consumers. in 2011 sprint was fined $400,000 for the same reason. the wireless company claims technical and human errors caused cell phone users to receive marketing calls and text messages. sprint will now have to report on regular basis to the fcc about do not call requests. target stock could be in for a heavy trading day. the retailer unveils earnings this morning. yesterday the stock sank 2%, as traders reacted to yet another change at the top. the head of target's canadian operations has been fired as the retailer struggles with sales in canada. it follows the recent departures of the ceo and the chief information officer, on the wake of the holiday cyber data breach.
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jp morgan is amoung 3 banks charged with rigging the euro market. hsbc, credit agricole, and jp morgan chase are all accused by the european commission. jp morgan says the charges are without merit. hsbc intends a vigorous defense while credit agricole is studying the allegations. on tuesday, jp morgan shareholders approved pay packages for the bank's top executives. including jamie dimon who says he is staying put for the next 5 years at chase. the banks legal fines top $20 billion. medtronic's earnings are taking a hit due to a long running patent fight. shares tripped 2% yesterday. the medical device maker said it will pay a one time $750 million settlement to edward lifesciences, followed by annual royalty payments of 40 to 60 million dollars through 2022. the two companies which have been engaged in a nearly 6 year long dispute over a heart valve patent. president obama is striking up conversations with corporations about investing in america. tuesday, 11 executives from
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companies that have opened new plants and are creating jobs in the u.s. met with the president at the white house. we want to make sure we are doing everything we can to be responsive to that process and we are doing a better job coordinating both between agencies and also between the various levels of government. the next select usa conference happens march 2015. china strikes back a day after the u.s. department of justice levelled criminal charges against five chinese military officials. china's foreign minister called the u.s. indictment of spying on u.s. companies false and says charges should be withdrawn. otherwise the u.s. is jeopardizing u.s.- china relations. north carolina is poised to become the least generous state in the nation when it comes to jobless benefits. starting july 6th... unemployment benefits will be available for only 14 weeks, down from 19 weeks. most states offer 26 weeks of benefits. north carolina has a republican governor and
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conservative state legislature. lawmakers made the cuts to rein in state debt. millions of americans are still underwater on their homes. that's according to zillow, which reports 9.7 million homeowners owe more on their homes than what's its currently worth. it's about 28% of the entire market, but it's down from a high of 41% in 2012. the data finds rising prices are helping homeowners in negative equity. home depot has the potential to hammer out a rally today. the diy store missed on earnings, blaming the frigid winter for sagging sales- but maintained its outlook. the stock edged up to $77 dollars, then ralled to $79 in the after hours session. investors clipped staples on word profits plunged 10% in the first quarter. the stock dropped 12% tuesday. and investors trampled dicks sporting goods stock by nearly 18% as the retailer lowered is profit forecast on weakness in sales of golf and hunting items.
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chipotle bans guns from it's restaurants. the chain has asked customers to leave weapons at home after gun rights advocates brought firearms into a dallas restaurant over the weekend, which quickly picked up attention on twitter. chipotle says it understands strong arguments on both sides of the issue, but says firearms can create an enviorment that is potentially intimidating to customers. as at&t moves toward merging with directv... and comcast plans to hook up with time warner... the fcc is calculating the climbing cost of cable. the average monthly price for expanded basic service jumped 5.1% to $64 in 2012. basic cable prices increased 6.5% to $22.63. the fcc finds that programing costs make up the largest part of the bill. a lawsuit is claiming that the introduction to one of the most famous rock songs of all time was stolen. parts of led zepplin's 'stairway to heaven' was lifted from a song called 'taurus' performed by the band spirit. so say lawyers representing now deceased band
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member randy california. led zepplin and spirit performed together several times in the 1960s. family members of california say a suit was not filed until now because they didn't have money for a lawyer. still to come: one entrepreneur puts a healthy spin on an american classic... plus... why "the oscars of the restaurant world" are moving out of the big apple. and... have a sweet tooth? stick around for whats trending the candy land. that's next after today's "now you kn" message.
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the so-called oscars of the food world are leaving the big apple. the james beard foundation awards are moving to chicago. the 2015 ceremony will be held in the windy city. it's
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the first time outside of new york in the chef award's history. organizers are not giving details about the move, but perhaps chicago officials made an offer they could not refuse. led by big names like mars, hershey and neslte, candy companies swallow up nearly 34 billion dollars annually here in the u.s. in today's cover story, a taste of what its like for the small firms trying to strike it rich on the sugar fix. every year, wille wonka wannabe's strut into the sweets and snacks expo in chicago to capitalize on confections. "this year we have 650 exhibitors on 3.5 acres of candy space. 167 of our exhibitors are here for the first time this year, really trying to see if they can make it or break it in the candy industry." these small businesses like miss ginny's english toffee have sweet dreams of being the next big thing. "right now, i have a small commercial kitchen and i have hopes of being werther's candy or something like that down the road."
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standing out on the show floor is a strategy some brands try to build new business. "we're the only encapsulated image lollipop you will see at this show." and connecting with potential customers is the biggest barrier these relative unknowns now face. sweet report paul-- coming up... why hedge funds are engaged with tiffany stock... and... a tastemaker who says
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he's made a breakthrough in the food industry wtih guilt free hot dogs! stay with us!
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if you relish the thought of a hot dog you can eat without all the guilt... an entreprenuer says he's putting the "healthy" into hot dogs. joining us on set this morning is bill kurtis of broadcaster fame. he is also the chairman of tallgrass beef. good moring to you. > > thank you so much. yes you're absolutely right. > > how did you come up with the healthy hot dog? what does that mean exactly? > > well i've been in grass fed beef for 8 years and i thought i needed a break through, i needed a success story and what if i just take all the healthy things i could possibly find within the genre and put them into a hot dog-- the iconic
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symbol for mothers and their kids, what would we have? well we have 100% grass-fed and grass fed-ish beef, no hormones, no antibiotics and no gluten, no gmos, no nitrates no nitrites. we wind up with pure beef that tastes great. > > i'm so glad you said that because it almost sounded like no fun but that's good to know. > > it turned up to be so tasty with a little recipe that my sausage maker comes up with that i think it's going to be a breakthrough. > > who is your competition out there because we do have the tofu dog and that turkey dog so who are you up against? well applegate makes an organic but you know organic means that the beef has been in pastures that haven't had pesticides and herbicides for three years. there's not a lot of difference between the tastes so ultimately you have to go for the taste. there aren't a lot. there maybe some grass fed beef hot dogs but we feel that we put
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them all together with a special food safety edition call high- pressure processing that blows away the pathogen's for six months and gives them a long shelf life. > > well bill as you know no business is without its challenges and during the recession you had some issues paying some of your suppliers and i know it's been settled but how did you bounce back? > > well first of all i paid them all personally. we just kept going because you know the recession was one thing, the banks pulling out of giving small businesses credit lines was the most important thing and i think was responsible for the slowness in getting back on track. you just sort of study your market, study your customers, try to take advantage of developments in the workplace and it takes capital, it takes research, and just good business. > > great to have you on the
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show and keep us posted. > > we will. i'll send you some hot dogs. > > i would love that. thank you. still to come-- will tiffany shine bright like a diamond this earnings season.. find out next in chart talk.
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james ramelli of keenonthemarket.com joins us now. good morning, james. > > good morning. > > well our shopping cart runneth over with retail stocks today starting with tiffany reported earnings. traditionally does this stock sell-off on earnings? > > traditionally it's a mixed performer on earnings. over the past eight quarters it's actually sold off four times and rallied four times with an average move around four and a half percent. this go round the options market is implying a round of four and a half percent move for tiffany by this friday's close. what's really interesting here is that that target would line up around the $93 level and on tuesday going into the close we saw a lot of institutional money coming in and buying complex options strategies known as one by 2 call spreads with a target
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of around 93. so when i see institutional money getting long t i f with that target around 93 which also lines up with a lot of historical and implied levels, i want to do the exact same thing so i am long tif through earnings here with a target of around 93 for this friday's expiration. > > well that would be a nice rally going from $80 to maybe above 93 what about american eagle also reporting in with earnings. > > so a e o is little more of a weaker performer on earnings over the past four quarters. it definitely has had a bias to the downside this time around the options market is implying that the stock can get as low as $10.50. now what's kind of tricky here is that there are no weeklies in aeo, there are only standard serial options. so if i want to get short via options i have to be short all the way through june expiration. now i think in terms of risk vs. reward for me here the best thing that's going to set up is the june 11th 10 call spread. its stock has a terrible chart, it's historically a weak performer on earnings, of i think it can move every bit to the downside of that 10.50 target. well thanks for helping us out today, james. > > thank you. that's all the time we have for today... coming up tommorrow in movies and money... godzilla is king at the box office-- how clever marketing by warner bros. is turning the film into a monster hit. from all of us at first business... have a wonderful wednesday!
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